Rhythm & Hues has lost its stalking horse bidder days before an auction for the bankrupt visual-effects company is scheduled to take place.
The company said in a statement that JS Communications has withdrawn its bid. No reason was given for the withdrawal, although Rhythm & Hues said that other prospective bidders have indicated that they will submit bids for the company by a March 22 deadline. The company said that it still anticipates there will be a "competitive auction."
The lose of JS Communications is a bitter pill for the company.
In bankruptcy cases, a stalking-horse bidder is selected from a pool of bidders so a financially distressed company can ensure that its assets are not undersold at auction.The stalking-horse bid represents the lowest acceptable offer.
Rhythm & Hues filed for bankruptcy protection in February, reporting that it had $27.5 million in assets and roughly $33.8 million in liabilities.